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Howard Stutz

Pinnacle grows third-quarter revenues despite hurricane disruption and challenging markets

25 October 2012

LAS VEGAS -- Pinnacle Entertainment, Inc. is making progress toward selling an empty land parcel the company controls in Atlantic City.

The Las Vegas-based regional casino operator told investors Wednesday it hopes to enter into a definitive agreement to sell the Boardwalk site by the end of the year.

The site formerly housed the since-demolished Sands Casino.

Pinnacle planned to build a hotel-casino complex on the site but scrapped plans three years ago with the economy crumbled.

Pinnacle told investors the company took a noncash impairment charge of $6.9 million on the Atlantic City land during the third quarter, which factored into the company's overall results.

Pinnacle said it grew revenues 2.8 percent in the quarter that ended Sept. 30 to $304.2 million as the company benefited from the Sept. 1 opening of the $358 million L'Auberge Baton Rouge.

Strong quarterly results from the L'Auberge Lake Charles in western Louisiana and the company's two casinos in St. Louis also boosted the company's quarter.

Pinnacle lowered its third-quarter net loss to $358,000, compared with $790,000 in the same quarter a year ago. The company's loss per share was one cent, the same as the third quarter of 2011.

Analysts said spotty results from several regional gaming markets have given them concern recently. However, Pinnacle seemed to rise above the problems.

"We'd characterize the performance as solid, reflective of Pinnacle's relatively healthy markets and its ongoing operating efficiencies," J.P. Morgan gaming analyst Joe Greff told investors.

Pinnacle Chief Executive Officer Anthony Sanfilippo said the results from the company's Louisiana properties were negatively affected by Hurricane Isaac, which hit the region at the end of August.

Macquarie Securities gaming analyst Chad Beynon said Pinnacle is the only regional casino company that has a positive rating despite concerns of diminished consumer spending patterns.

"The focus on the high-end customer, in addition to the attractiveness of the markets in which its properties are located, should provide Pinnacle with the ability to outpace overall regional growth trends in the near term," Beynon said.